TNAG-0055-FCO40-91-Defence-review-1977 — Page 55

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might be possible to discuss with Malaysia in June our proposals for the reductions to be achieved by 1970/71. It would be necessary to examine

the economic consequences of the reductions and in his meeting earlier

that day with the Malaysian Trade Unions they had emphasised very much

the need for adequate redundancy terms and for alternative employment from the Malaysian Government. The British Government was prepared to

offer economic aid on a significant scale to offset the effects of the

reductions and he asked whether it would be helpful to the Malaysian Government if a British economic team, which was already in Singapore,

visited Kuala Lumpur for discussions on a wholly factual basis on

economic issues. He thought it would be wrong for any publicity to be

given to such a visit. Tun Razak indicated that the team would be very welcome and entirely agreed that there should be no publicity of any

kind.

9. Mr. Healey said that he agreed with his Malaysian colleagues that the difficult problem was the long term one. He was very conscious of the

points that had been made to him but there were also problems in the

United Kingdom and, as Defence Secretary, he also had a responsibility to

the Services and specifically a need to indicate to them as clearly as

possible what the long term size, shape and equipment of the forces would

be and for what role they would be organised. The real issue was the

terms of any announcement that the British Government might make and it would be some time before we would be ready to deal with this problem.

Nevertheless he undertook that the Malaysians would be kept in touch.

After Lunch (The British side was joined by General Sir Michael Carver

and Brigadier Cowper. The Malaysians consisted of Tun Razak, Tan Sri Ghazali, Enche Khadir, General Osman and General Hamid).

10. Mr. Healey summarised the position that had been reached as a result of the discussions before lunch emphasising that the position up to 1970/71 was accepted, as was the preference for the air and naval approach, but

that Malaysia had expressed great concern about the position in the middle 70s and particularly any announcement about it. He added that Tun Razak

and he had agreed in talking to the press there would be no reference at

all to the longer term position but that both of them would indicate that

their discussions had been about further reductions in British forces in

the area during the next few years.

11.

Tun Razak agreed with Mr. Healey's summary and added that as he

understood it reductions would not alter Britain's responsibility under

the Defence Treaty but only the number of British Forces that would be

stationed in Singapore and Malaysia.

12.

General Osman asked where British forces would be if Britain withdrow

from the mainland of Asia in 1975. Mr. Healey replied that there was as

yot no decision

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